Company Law Answer Writing CS Executive 2026: Case Study Questions with Detailed Answers

Company Law is one of the most important and scoring subjects in the CS Executive exam, but many students struggle with case study questions. The problem is not lack of knowledge, but the inability to present answers in a structured and professional manner.

To score well, students must understand how to apply legal provisions to practical scenarios. With the right approach, clear structure, and consistent practice, even complex case studies can be handled with confidence.

Introduction to Case Study Problem-Solving

When tackling Company Law questions, especially those in a case study format, it is crucial to read the questions first. This preliminary step helps in identifying the specific legal issues and relevant sections of the law to focus on before diving into the detailed facts of the case scenario. This strategic approach ensures efficient analysis and accurate problem-solving.

Case Study: Super Shine Detergents Limited

Scenario:

Super Shine Detergents Limited operates with four directors: Saurabh, Saumyadeep, Suchitra, and Sohini. They scheduled a board meeting for February 20, 2025, to address various corporate secretarial compliance issues. Lacking an in-house Company Secretary (CS), they engaged a practicing CS (the student) to provide expert views and guidance.

Specific Issues Raised:

1. Share Transposition Request: Sohini presented a request concerning 500 equity shares jointly held by Dhiman, Bobby, and Sam, in that specified order. The joint shareholders desire to transpose the names to Sam, Dhiman, and Bobby for 300 shares. Sohini sought the board's analysis on the feasibility.

2. New Company Incorporation: Saurabh informed the board about the promoters' intention to incorporate a new company, Rhimjhim Tourism Corporation, in a scenic hilly region of Uttar Pradesh. This proposed entity, dealing in tourism, would eventually become a subsidiary of Super Shine Detergents Limited to enhance brand value. Saurabh sought feedback and examination of this proposal.

3. Inspection of Register of Deposits: Suchitra highlighted that Vinod, an MBA and a long-standing member of the company, wished to inspect the Register of Deposits. The secretarial office had denied his request because Vinod did not disclose his reasons. Suchitra asked the directors to review this matter.

4. Statutory Auditor Re-appointment: Saumyadeep noted that Srishti, proprietor of S. Nagori and Associates, Chartered Accountants, had served as Statutory Auditor since 2019-20. The Audit Committee was satisfied, and the firm expressed willingness to continue. The company's financials include: Paid-up Capital: ₹18 Crores, Turnover: ₹125 Crores, Borrowings: ₹12 Crores, Net Worth: ₹8 Crores. Saumyadeep requested the board's decision on re-appointment.

5. Creation of Charge: Before concluding the meeting, all four directors collectively raised the matter of creating a charge on the company's assets. This charge would secure a ₹4 Crore loan from SBI, intended for raw material purchases, using the company's immovable property as security.

Analysis of Case Study Questions

Let’s understand answer writing through a practical case study.

The company has four directors and multiple issues were discussed in a board meeting. As a practicing Company Secretary, you are required to provide legal advice on each issue based on the Companies Act, 2013.

 1. Transposition of Names in Share Certificate

Question: Can the directors of the company allow transposition of the name in the share certificate?

Answer: Yes, transposition of names in a share certificate is generally permissible, but specific conditions apply based on the extent of transposition.

Explanation and Rules:

• Transposition occurs when joint shareholders request a change in the order of names in the Register of Members without any change in ownership.

• When transposition involves all jointly held shares, Form SH-4 (Share Transfer Form) is typically not required, and no stamp duty is payable, as no transfer of ownership takes place.

• However, a critical distinction applies: If transposition is requested for only a part of the shareholding (e.g., 300 out of 500 shares, as in this case), then the execution of a transfer deed along with payment of stamp duty becomes necessary, implying the requirement of Form SH-4.

2. Company Name Incorporation: "Rhimjhim Tourism Corporation"

Question: Can a company be incorporated in the name and style of Rhimjhim Tourism Corporation Limited under Companies Act 2013?

Answer: The name "Rhimjhim Tourism Corporation Limited" cannot be incorporated without the previous approval of the Central Government (CG).

Explanation and Rules:

• According to Section 4 of the Companies Act 2013, a company's name must not be identical to an existing company's name, not be offensive, and not be undesirable in the Central Government's (CG) opinion.

• The words "Tourism Corporation" in the proposed name could be deemed undesirable because such terms may imply a connection with the Government.

• Names suggesting a government affiliation can only be used with the express approval of the Central Government.

3. Inspection of Register of Deposits

Question: Comment on the validity of the action of the secretarial office in refusing the inspection of the Register of Deposits.

Answer: The refusal by the secretarial office to permit inspection of the Register of Deposits is valid.

Explanation and Rules:

• As per the Companies (Acceptance of Deposits) Rules, 2014, companies accepting deposits are required to maintain a Register of Deposits at their registered office.

• However, the Companies Act, 2013, and its associated rules do not explicitly contain provisions granting members the right to inspect the Register of Deposits.

• In the absence of such a specific legal provision, the company is not obligated to allow members to inspect this register, especially when the member does not provide a valid reason for their request.

• Therefore, the company's decision to refuse inspection without a stated reason is justified.

4. Re-appointment of Statutory Auditor

Question: In light of the provisions of the Companies Act, examine whether S. Nagori and Associates can be re-appointed as statutory auditor for the year 2024-25.

Answer: The eligibility for re-appointment depends on whether Srishti is considered an individual auditor or S. Nagori and Associates as an auditing firm, and their respective tenure limits.

Explanation and Rules:

• Key Considerations for Auditor Rotation:

• Individual Auditor: An individual auditor can serve for a maximum of one term of five consecutive years. Upon completing this term, they are not eligible for re-appointment for the subsequent five years.

• Auditing Firm: An auditing firm can hold office for a maximum of two terms of five consecutive years each. After completing two such terms, the firm is not eligible for re-appointment for the subsequent five years.

• Application to the Case:

• Srishti commenced her tenure in 2019-20. By 2024-25, this marks the sixth year of service.

• If Srishti is treated as an individual auditor, she would have completed her five-year term (2019-20 to 2023-24) and would therefore not be eligible for re-appointment for 2024-25.

• If S. Nagori and Associates is considered an auditing firm, and this is their first five-year term, they would be eligible for re-appointment for a second term.

• The question's phrasing ("Srishti, proprietor of S. Nagori and Associates" holding office, but asking about "S. Nagori and Associates" re-appointment) necessitates a clear understanding of whether the individual or the firm's rotation rules apply.

5. Verification of Instruments Creating Charge

Question: Advise the Directors how the instruments creating charge filed with the Registrar are verified.

Answer: The verification of instruments creating a charge is conducted according to the Companies (Registration of Charges) Rules.

Explanation and Rules:

• Every instrument that evidences the creation of a charge and is required to be filed with the Registrar must be verified.

• The verification process varies based on the location of the property involved:

• For property situated outside India: A copy of the instrument can be verified by a certification issued either under the seal or hand of a director or Company Secretary of the company, or by an authorized officer or the charge holder.

• For property situated in India: Verification typically follows relevant Indian legal documentation and attestation norms, ensuring proper authentication of the instrument.